The profits of the fast fashion giant, the Chinese Shein, double
Online fast-fashion giant Shein – whose clothing is popular among Gen Z shoppers – has more than doubled its profits and is awaiting approval from Beijing to begin listing proceedings in New York or London. In 2023, the Financial Times reveals that he oversaw accounting documents, profit reached record level of more than $2 billion recording approximately $45 billion in gross merchandise value, i.e. the total value of goods sold on its website. In 2022 the profit was $700 million and in 2021 it was $1.1 billion.
Now the company founded in China but with headquarters moved to Singapore, it is waiting for regulators in Beijing and Washington to approve its listing, which is expected to be the biggest initial public offering of the year. The group was valued at more than $60 billion in a recent financing round.
This is not just a financial operation: the IPO is considered by investors to be an indicator of Beijing’s attitude against companies founded in China but moved abroad to avoid geopolitical tensions. It is also a test of Beijing’s willingness to allow Chinese companies to raise billions of dollars on Wall Street after the crackdown on the technology sector. According to the FT’s sources, within the company the China Securities Regulatory Commission and the Cyberspace Administration of China are expected to approve the share sale in the coming weeks. But in reality, according to rumors, the application to the SEC has been pending for several months now, and therefore the company is thinking of listing in London as a reserve option.
Although Shein has moved its headquarters to Singapore and makes all of its sales outside of China, the company was founded in the Chinese city of Nanjing and continues to operate the majority of its business from the country, prompting the group to seek approval from local regulators. As of the end of 2022, it had 10,382 employees in mainland China working for more than a dozen subsidiaries and doing everything from logistics to writing code. On LinkedIn, however, the company has around 200 employees in Singapore.Xu Yangtian, the 40-year-old founder also known as Sky Xu, was born in China but followed his company to Singapore.
SAccording to lobby statements filed in the United States, it holds 37% of Shein. Other major shareholders include Sequoia China, now known as HongShan, General Atlantic and Abu Dhabi’s sovereign wealth fund Mubadala.Shein spent heavily on lobbying in Washington during the IPO push and following growing scrutiny over the stock model. company to air-ship Chinese goods directly to US buyers to avoid import taxes. U.S. public records show Shein spent nearly $2 million on lobbying in nine months of last year.
The company’s presence in China has often been criticized by lawmakers in Washington. Last February, Senator Marco Rubio urged the head of the US Securities and Exchange Commission, Gary Gensler, in an open letter, to “request extraordinary information from Shein on its structure, on interactions with the Chinese government and with the Chinese Communist”.